What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-27 · 269 added, 340 removed, 1009 unchanged (38% of the section changed)

3 unchanged sentences

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes included elsewhere in this Annual Report.

Vital Farms’ aspiration is to become America’s most trusted food company.

Our mission is to bring ethical food to the table, and we carry out this mission by raising the standards in the food industry and disrupting industrial, factory food norms.

Our approach has allowed us to bring high-quality products from our network of family farms to a national audience and has enabled us to become the leading U.S.

Our approach has allowed us to bring high-quality products from our farm network to a national audience and has enabled us to become the leading U.S.

brand of pasture-raised eggs and the second-largest U.S.

5 unchanged sentences

Our purpose is to improve the lives of people, animals and the planet through food.

We are committed to Conscious Capitalism, which prioritizes positive, long-term outcomes with all of our stakeholders – farmers and suppliers, customers and consumers, communities and the environment, employees, who we refer to as crew members, and stockholders.

We are committed to Conscious Capitalism, which prioritizes positive, long-term outcomes for all of our stakeholders – farmers and suppliers, customers and consumers, communities and the environment, employees, who we refer to as crew members, and stockholders.

We make decisions based on what is sustainable for all our stakeholders.

3 unchanged sentences

Our approach has been validated by our financial performance and our impact on the food industry.

We are also a Delaware public benefit corporation and a Certified B Corporation, a designation reserved for businesses that balance profit and purpose to meet the highest verified standards of social and environmental performance, public transparency and legal accountability.

We source our eggs from a network of over 425 family farms.

We are also incorporated as a Delaware public benefit corporation and a Certified B Corporation, a designation reserved by B Lab, an independent non-profit organization, for businesses that balance profit and purpose to meet the highest verified standards of social and environmental performance, public transparency and legal accountability.

We source our eggs from a network of more than 600 small farms, including our contracted family farms along with a small number of company-owned accelerator farms.

The cream for our butter is sourced from a network of family farms contracted by our butter supplier.

We have strategically designed our supply chain to ensure high production standards and optimal year-round operation.

We are motivated by the positive impact we have on rural communities and enjoy a strong relationship and reputation with our network of farmers.

We primarily work with our farms pursuant to buy-sell contracts.

We are motivated by the positive impact we have on rural communities and enjoy a strong relationship and reputation with the family farmers in our network.

We primarily work with our contracted farms pursuant to buy-sell contracts.

Under these arrangements, the farmer is responsible for all of the working capital and investments required to produce the eggs and manage the farm, including purchasing the birds and feed supply.

As a result of ongoing elevated construction costs associated with our new farms, we incurred incremental farm recruitment costs in 2024 that were required to be paid in advance of these farms beginning to produce eggs, and we expect such incremental costs to continue into fiscal 2025.

As a result of elevated construction costs associated with our new farms, we incurred incremental farm recruitment costs in 2024 and 2025 that were required to be paid in advance of these farms beginning to produce eggs.

These costs are expected to be recognized over the term of the related buy-sell contracts with the new farms, which are generally four to five years in length.

The impact to fiscal 2024 was approximately $15.0 million to working capital.

The impact to fiscal 2024 was approximately $15.0 million to working capital, and the impact to fiscal 2025 was approximately $30.0 million to working capital.

We believe the impact to our working capital resulting from these upfront costs could range from $25.0 million to $35.0 million in fiscal 2026.

2 unchanged sentences

We have continued to command premium prices for our products, including our shell eggs.

Our loyal and growing consumer base has fueled the expansion of our brand from the natural channel to the mainstream channel.

We believe the success of our brand demonstrates that consumers are demanding premium products that meet a higher ethical standard of food production.

We have a strong presence at The Kroger Co., Sprouts Farmers Market, Target Corporation and Whole Foods Market, Inc., or Whole Foods, and we also sell our products at Albertsons Companies, Inc., Publix Super Markets, Inc.

and Walmart, Inc.

Our loyal and growing consumer base has fueled the continued expansion of our brand in the natural and mainstream retail channels.

We believe the success of our brand demonstrates that consumers are demanding premium products that meet a higher ethical standard.

and other retailers.

We offer 23 retail stock keeping units, or SKUs, through a multi-channel retail distribution network.

We believe we have significant room for growth within the retail and foodservice channels through growing brand awareness, gaining additional points of distribution and new product innovation.

Our shell eggs are collected from farmers by a third-party freight carrier and placed in cold storage until we pack them for shipping to our customers at our state-of-the-art shell egg processing facility, Egg Central Station.

Egg Central Station is approximately 153,000 square feet and utilizes highly automated equipment to grade and package our shell egg products.

Egg Central Station is capable of packing approximately six million eggs per day and has an SQF Excellent rating, the highest level of such certification from the Global Food Safety Initiative.

To help support continued supply and further growth, we announced in 2024 that we plan to locate a second egg washing and packing facility in Seymour, Indiana, which we anticipate will be fully operational in 2027.

Our shell eggs are collected from farmers by a third-party freight carrier.

They are then placed in cold storage at a new dedicated cold storage and fulfillment center operated and owned by our longtime cold storage provider until we pack them for shipping to our customers at Egg Central Station, our state-of-the-art shell egg processing facility in Springfield, Missouri.

Egg Central Station is approximately 153,000 square feet and utilizes highly automated equipment to grade and package our shell egg products, including an additional Moba egg grading system installed in 2025 to help meet continued demand for our shell eggs.

Egg Central Station is capable of packing approximately more than 7.5 million eggs per day and has an SQF Excellent rating, the highest level of such certification from the Global Food Safety Initiative.

To help support continued supply and further growth, we broke ground in fiscal 2025 on Vital Crossroads, our planned second egg washing and packing facility with onsite cold storage in Seymour, Indiana, which we anticipate will be fully operational in 2027.

We intend to build upon the foundational key learnings and successes from our Egg Central Station facility in Missouri with this second facility and further expand our already resilient supply chain.

To help meet the continued demand for our shell eggs, we announced in January 2025 that we plan to install an additional Moba egg grading system, the primary automation technology used in washing, sorting, and packing shell eggs, at Egg Central Station.

Installation of this new system is expected to begin in the first quarter of 2025 and to be fully operational by the end of fiscal 2025.

In fiscal 2024, we purchased approximately 1,040 acres of farmland in Indiana for approximately $7.5 million.

Our intent is to develop this farmland (along with other potential parcels to be purchased in the future) and utilize it for “accelerator farms” to provide learning and development opportunities within our farm network and to help ensure adequate supply for our future egg washing and packing facility in Seymour, Indiana, while preserving the ability in the future to sell turnkey farms to interested farmers.

In fiscal 2024, we purchased approximately 1,040 acres of farmland in Indiana for approximately $7.5 million and in fiscal 2025, we purchased approximately 500 acres of farmland in Indiana for approximately $3.8 million.

Our intent is to develop this farmland (along with other potential parcels to be purchased in the future) and utilize it for “accelerator farms” to provide learning and development opportunities within our farm network and to help ensure adequate supply for our future egg washing and packing facility with onsite cold storage in Seymour, Indiana, while preserving the ability in the future to sell turnkey farms to interested farmers.

In fiscal 2025, we placed laying hens at the first of these accelerator farms, and we have begun to source eggs from these farms.

In fiscal 2025, we elected to sell certain undeveloped parcels of owned farmland in Indiana, totaling approximately 526 acres.

Three parcels totaling approximately 263 acres were sold during fiscal 2025 for approximately $1.6 million.

Our products are primarily distributed through a broker-distributor-retailer network, whereby brokers represent our products to distributors and retailers who will in turn sell our products to consumers.

9 unchanged sentences

Since initial outbreaks of HPAI in early 2022, we have been closely following the progression of the virus and working with our farmers, veterinarians, government health officials and animal welfare auditors to ensure that our flocks are kept as safe as possible.

In fiscal 2024, we experienced an outbreak at one of our farms.

In fiscal 2024, we were made aware of an outbreak of a virus called Egg Drop Syndrome (EDS) in the Midwest, and nine of our farms were impacted in fiscal 2024.

In fiscal 2024, we experienced an outbreak of HPAI at one of our farms.

We did not experience outbreaks on any of our farms in fiscal 2025.

In fiscal 2024, we were made aware of an outbreak of a virus called Egg Drop Syndrome (EDS) in the Midwest.

Nine of our farms were impacted by EDS in fiscal 2024, and 12 of our farms were impacted in fiscal 2025.

EDS is characterized by the production of pale, thin-shelled, soft-shelled, or shell-less eggs by seemingly healthy laying hens.

1 unchanged sentence

While we have not experienced material disruptions to our egg supply due to HPAI and EDS outbreaks, if a substantial portion of our farms or production facilities were affected, this could materially and negatively affect our supply chain and operating results.

Additionally, agricultural diseases such as HPAI or EDS have resulted and could continue to result in supply shortages and price increases across the egg market, including shortages of eggs on shelves at our retail customers.

We are confident in the measures we have taken to reduce the risk of HPAI and EDS on our farms and production facilities (including through procurement of newly available vaccinations for EDS), as well as our ability to mitigate impacts on supply.

Additionally, agricultural diseases such as HPAI or EDS have resulted and could in the future result in supply shortages and price increases across the egg market, including shortages of eggs on shelves at our retail customers.

We are confident in the measures we have taken to reduce the risk of HPAI and EDS on our farms and production facilities, including through procurement of vaccinations for EDS, as well as our ability to mitigate impacts on supply.

However, given continued uncertainty about future outbreaks and governmental responses to such outbreaks, we cannot predict the ultimate impact that agricultural diseases such as HPAI and EDS will have on our business.

Economic Uncertainties

The current inflationary environment may affect our business and corresponding financial position and cash flows.

Economic Uncertainty and Volatility

Economic uncertainty and volatility may affect our business and corresponding financial position and cash flows.

Inflationary factors, such as increases in the cost of materials and supplies, interest rates and overhead costs, may adversely affect our operating results.

Elevated interest rates also present a recent challenge impacting the U.S.

economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future.

Elevated interest rates also present a challenge impacting the U.S.

economy and could make it more difficult for us or our farmers to obtain traditional financing on acceptable terms, if at all, in the future.

Certain of our products and elements of our supply chain, including our butter products and certain processing equipment and packaging, are imported from international markets.

We expect that tariffs and restrictions on international trade will continue to impact the cost or availability of these items, particularly our butter products.

However, the duration, magnitude and scope of any additional tariffs or restrictions on international trade are difficult to predict, including any related impacts to consumer demand, along with the extent (if any) to which we will be able to offset the impacts of such actions through our mitigation efforts.

In November 2025, the Supreme Court of the United States (SCOTUS) heard oral arguments on tariffs imposed under the International Emergency Economic Powers Act.

In February 2026, SCOTUS issued a decision invalidating these tariffs;

however, President Trump subsequently signed an executive order implementing a new 10% global tariff pursuant to alternative statutory authority, which may be raised to 15% These actions have contributed to continued uncertainty and volatility in the trade environment.

It remains unclear whether and to what extent duties previously collected under the invalidated tariffs will be refunded, whether refunds will be subject to administrative or judicial processes, or whether offsets or alternative measures may be imposed.

We are evaluating the potential impact of these developments on our financial statements and business.

Additionally, any increased recessionary risk, together with the foregoing, could result in further economic uncertainty and volatility in the capital markets and could negatively affect our operations.

We work closely with our farmers, suppliers and third-party manufacturers to manage our supply chain activities and mitigate potential disruptions to our product supplies as a result of supply chain disruptions associated with such uncertainties.

We currently expect to have an adequate supply of our products, packaging and freight through fiscal 2026.

Liquidity and Capital Resources Overview

With cash, cash equivalents and marketable securities of $160.3 million as of December 29, 2024 and $60.0 million available under our credit facility agreement with JPMorgan Chase Bank, N.A., or the Credit Facility, we anticipate having sufficient liquidity to make investments in our business to support our long-term growth strategy.

We expect that our cash, cash equivalents and marketable securities as of December 29, 2024, together with cash provided by our operating activities and availability of borrowings under our Credit Facility, will be sufficient to fund our operating expenses for at least the next 12 months and to make investments in our business in support of our long-term growth strategy.

Our future capital requirements will depend on many factors, including our pace of new and existing customer growth, our investments in innovation, our investments in acquisitions or other growth opportunities, our investments in partnerships and unexplored channels and ongoing costs associated with expansions of our production capacity.

We may be required to seek additional equity or debt financing.

However, a significant disruption of global financial markets (including a disruption due to public health pandemics, geopolitical tensions and wars, inflation or other factors) may result in our inability to access additional capital, which could in the future negatively affect our operations.

In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all.

If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation and product expansion, we may not be able to compete successfully, which would harm our business, operations and results of operations.

For additional information, see the section titled “Liquidity and Capital Resources” below.

Our Fiscal Year

23 unchanged sentences

We rely on third-party data to calculate the portion of retail sales attributable to such retailers, but this data is inherently imprecise because it is based on gross sales generated by our products sold at retailers, without accounting for price concessions, promotional activities or chargebacks in the ordinary course of business, and because it measures retail sales for only the portion of our retailers serviced through distributors.

Based on this third-party data and internal analysis, Whole Foods accounted for approximately 23% of our retail sales for each of the fiscal years ended December 29, 2024 and December 31, 2023.

As of December 2024, there were approximately 24,000 stores selling our products.

Based on this third-party data and internal analysis, Whole Foods accounted for approximately 23%, 23% and 20% of our retail sales for fiscal years 2023, 2024 and 2025, respectively.

As of December 2025, there were more than 24,000 stores selling our products.

We expect the retail channel to be our largest source of net revenue for the foreseeable future.

1 unchanged sentence

Additionally, we believe there is significant opportunity to gain incremental stores from existing customers as well as by adding new retail customers.

We also believe there is significant further long-term opportunity in additional distribution channels, including the convenience, drugstore, club, military and international markets.

We also believe there is significant further long-term opportunity in additional distribution channels, including the convenience, drugstore and club markets.

Our ability to execute this strategy will increase our opportunities for incremental sales to consumers, and we also believe this growth will allow for margin expansion.

5 unchanged sentences

We are working with ROOTED Food Sales Agency, a foodservice sales and marketing agency, to increase our category share in broad-line distribution and to access additional national and regional restaurant menus.

We are also leveraging foodservice as a critical consumer touchpoint to drive brand awareness, and we are investing in co-marketing to reach new households.

We believe co-marketing is mutually beneficial to foodservice operators because it helps to differentiate their brands, enhances their perceived customer value and drives loyalty.

We are also leveraging foodservice as a critical consumer touchpoint to drive brand awareness, and we are investing in syndicated data to reach strategic restaurant partners that will be mutually beneficial to reach new households.

We believe this syndicated data provides valuable reporting, trends, and analytics to augment our storytelling on how we differentiate from other egg brands within the foodservice channel, which enhances their perceived customer value and drives loyalty.

Expand Our Product Offerings

14 unchanged sentences

We anticipate that these promotional activities, credits and discounts could materially impact our net revenue and that changes in such activities could impact period-over-period results.

Our shell eggs are sold to consumers at a premium price point, and when prices for commodity shell eggs fall relative to the price of our shell eggs (including due to any price increases we may implement), price-sensitive consumers may choose to purchase commodity shell eggs offered by our competitors instead of our eggs.

Our shell eggs are sold to consumers at a premium price point, and when prices for commodity shell eggs fall relative to the price of our shell eggs (including due to supply fluctuations or any price increases we may implement), price-sensitive consumers may choose to purchase commodity shell eggs offered by our competitors instead of our eggs.

As a result, low commodity shell egg prices may adversely affect our net revenue.

We increased prices on certain of our products in each of fiscal years 2022, 2023 and 2024.

We have periodically elected to increase prices on certain of our products.

While we have not seen significant decreases in sales volume due to previous price increases, if we further increase prices to offset higher commodity prices or other costs, we could experience lower demand for our products, decreased ability to attract new customers and lower sales volumes.

5 unchanged sentences

Overhead costs in cost of goods sold include utilities, insurance, inbound freight, storage fees related to our warehouse and depreciation and amortization expenses related to our assets used in production.

We expect cost of goods sold to increase in the future in connection with the development and staffing of our second egg washing and packing facility in Indiana.

We expect cost of goods sold to increase in the future in connection with the development and staffing of Vital Crossroads, our second egg washing and packing facility with onsite cold storage in Indiana, as well as a result of the factors described above in “Known Trends, Events and Uncertainties–Economic Uncertainty and Volatility.”

Selling, General and Administrative

4 unchanged sentences

Shipping and distribution expenses consist primarily of costs related to third-party freight for our products.

We expect shipping and distribution expenses to increase in absolute dollars in the medium-to-long term as we continue to scale our business, and there is a risk that such expenses could continue to increase due to economic uncertainty, geopolitical tensions or wars.

Result of Operations

2 unchanged sentences

The additional week in a 53-week fiscal year is added to the fourth quarter, making such quarter consist of 14 weeks.

Fiscal 2024 was a 52-week fiscal year, as compared to a 53-week fiscal year for fiscal 2023.

Comparison of Fiscal Years Ended December 28, 2025 and December 29, 2024

16 unchanged sentences

(1) Includes stock-based compensation expense of $11,794 and $9,972 in selling, general and administrative for the fiscal years ended 2025 and 2024, respectively, and $595 and $296 in cost of goods sold for the fiscal years then ended, respectively.

(2) As described in the notes to our financial statements elsewhere in this document, fiscal 2024 was a 52-week fiscal year as compared to a 53-week fiscal year for fiscal 2023.

Fiscal Year Ended

52-Weeks Ended

(in thousands)

The increase in net revenue of $134.5 million, or 28%, was primarily driven by volume-related increases of $103.0 million and price-related increases of $31.5 million.

The volume favorability was primarily driven by increases at both new and existing customers.

The increase in net revenue of $153.1 million, or 25%, was driven by volume-related increases of $78.3 million and price/mix benefits of $74.9 million.

Volume growth was driven by accelerated demand for existing products and expanded item offerings with existing customers.

Net revenue from sales through our retail channel was $727.9 million and $582.4 million for fiscal years ended 2025 and 2024, respectively.

The extra week in fiscal 2023, which was 53 weeks compared to 52 weeks in fiscal 2024, partially offset the increase in net revenue in fiscal 2024 by $8.5 million.

Excluding the extra week, net revenue increased 30.9% in fiscal 2024.

Gross Profit and Gross Margin

Fiscal Year Ended

52-Weeks Ended

(in thousands)

The increase in gross profit of $67.6 million, or 42%, was driven by higher net revenue generated during the fiscal year ended December 29, 2024.

The increase in gross margin during the fiscal year ended December 29, 2024 compared to the fiscal year ended December 31, 2023 was primarily driven by price/mix benefits, including price increases on our organic egg portfolio in January 2024 and fully realizing our February 2023 price increase across the entire shell egg portfolio, as well as benefits of scale, operational efficiencies and more favorable commodity and diesel costs.

This was partially offset by an increase in labor and overhead costs.

The increase in gross profit of $55.8 million, or 24%, was driven by higher net revenue generated during the period from volume growth, increased pricing across our shell egg portfolio and favorable mix benefits.

Gross margin for the fiscal year ended December 28, 2025 decreased slightly compared with the gross margin for the fiscal year ended December 29, 2024 as investments were made to continue to scale and grow the business driven by increases in labor and overhead costs, partially offset by favorable price/mix benefits.

Operating Expenses

Selling, General and Administrative

Fiscal Year Ended

52-Weeks Ended

(in thousands)

2 unchanged sentences

The increase in selling, general and administrative expenses of $25.5 million, or 19%, was primarily driven by:

• an increase of $15.5 million in employee-related costs, including stock-based compensation, driven by an overall increase in employee headcount to support our continued growth;

• an increase of $11.1 million in marketing and brokerage-related expenses due to the expansion of the business;

• an increase of $3.8 million in legal and professional service expenses due to the expansion of the business;

• an increase of $1.8 million in technology and software-related expenses due to the expansion of the business.

• an increase of $10.4 million in employee-related costs, including stock-based compensation, driven by an overall increase in employee headcount;

• an increase of $10.3 million in marketing-related expenses to support future growth of the business;

• an increase of $3.8 million in technology and software related expenses due to the implementation of our new cloud-based enterprise resource planning system and expansion of the business;

• an increase of $1.0 million in other selling, general, and administrative expenses.

Shipping and Distribution

Fiscal Year Ended

52-Weeks Ended

(in thousands)

1 unchanged sentence

Percentage of net revenue

The increase in shipping and distribution costs of $5.1 million, or 19%, was driven by higher sales volumes, partially offset by favorable linehaul and fuel rates.

The increase in shipping and distribution costs of $5.4 million, or 17%, was driven by higher sales volumes and linehaul rates.

Interest Expense

Fiscal Year Ended

52-Weeks Ended

Interest expense

The increase in interest expense of $0.2 million, or 29%, was primarily driven by an increase in finance leases which generated an increase in interest expense related to those leases.

The decrease in interest expense of $0.1 million, or 13%, was primarily driven by a reduction in interest paid on finance leases.

Interest Income

Fiscal Year Ended

52-Weeks Ended

(in thousands)

Interest income

The increase in interest income of $2.7 million, or 106%, was primarily driven by higher interest income on our available-for-sale securities portfolio.

The decrease in interest income of $0.2 million, or 4%, was primarily driven by lower interest income on our available-for-sale securities portfolio.

Other Expense, net

Fiscal Year Ended

52-Weeks Ended

(in thousands)

Other expense, net

The change in other expense, net of $2.6 million was primarily driven by losses on our commodity derivative instruments during the fiscal year ended December 29, 2024.

The increase in other expense, net of $1.0 million, or 399%, was primarily driven by higher losses on our commodity derivative instruments during the fiscal year ended December 28, 2025.

Income Tax Provision

Fiscal Year Ended

52-Weeks Ended

(in thousands)

Income tax provision

The change in the income tax provision of $7.5 million, or 113%, was primarily driven by the increase in net income before income taxes earned in the fiscal year ended December 29, 2024.

The increase in the income tax provision of $10.8 million, or 77%, was primarily driven by an increase in net income for the fiscal year ended December 28, 2025 compared to the fiscal year ended December 29, 2024 partially offset by a decrease in the tax benefit of non-qualified stock option exercises that occurred during the fiscal year ended December 28, 2025 compared to the fiscal year ended December 29, 2024.

Comparison of Fiscal Years Ended December 29, 2024 and December 31, 2023

For the discussion of the financial condition and results of operations for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 25, 2022, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Components of Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on March 7, 2024.

For the discussion of the financial condition and results of operations for the fiscal year ended December 29, 2024 compared to the fiscal year ended December 31, 2023, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Result of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024, filed with the Securities and Exchange Commission on February 27, 2025.

Non-GAAP Financial Measures

8 unchanged sentences

• Interest income;

• Amortization of cloud computing arrangements.

Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, GAAP.

1 unchanged sentence

In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.

Beginning in fiscal year 2025, amortization of cloud computing arrangements is included in our Adjusted EBITDA calculation.

We recently completed a multi-year transition to a new cloud-based enterprise resource planning system to support our future growth and more fully optimize our existing processes, which we began to amortize in the fourth quarter of fiscal year 2025.

Amortization of cloud computing arrangements is recognized in selling, general and administrative expenses in our consolidated statements of income.

Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.

15 unchanged sentences

Interest income

Amortization of cloud computing arrangements

Adjusted EBITDA

3 unchanged sentences

We had net income of $66.3 million for the fiscal year ended December 28, 2025 and retained earnings of $149.4 million as of December 28, 2025.

With cash, cash equivalents and marketable securities of $113.4 million as of December 28, 2025 and $60.0 million available under our credit facility agreement with JPMorgan Chase Bank, N.A., or the Credit Facility, we anticipate having sufficient liquidity to make investments in our business to support our long-term growth strategy.

Funding Requirements

We expect that our cash, cash equivalents and marketable securities, together with cash provided by our operating activities and available borrowings under our existing JPMorgan Credit Facility, will be sufficient to fund our operating expenses for at least the next 12 months.

We further believe that we will be able to fund potential operating expenses and cash obligations beyond the next 12 months, through a combination of existing cash, cash equivalents and marketable securities, cash provided by our operating activities and available borrowings under our JPMorgan Credit Facility.

We expect that our cash, cash equivalents and marketable securities, together with cash provided by our operating activities and available borrowings under our existing Credit Facility, will be sufficient to fund our operating expenses for at least the next 12 months.

Our future capital requirements will depend on many factors, including our pace of new and existing customer growth, our investments in innovation, our investments in acquisitions, partnerships and unexplored channels and the potential costs associated with future expansion of our production capacity.

We may be required to seek additional equity or debt financing.

However, a significant disruption of global financial markets (including a disruption due to public health pandemics, geopolitical tensions and wars, trade wars, inflation or other factors) may result in our inability to access additional capital, which could in the future negatively affect our operations.

In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all.

As of December 28, 2025, future minimum lease payments under non-cancelable operating leases totaled $54.1 million and future minimum lease payments under non-cancelable finance leases totaled $11.4 million.

Additionally, in 2024 we acquired land in Seymour, Indiana for a planned additional egg washing and packing facility.

We anticipate that we will incur approximately $8.0 million to $11.0 million in capital expenditures related to the new egg washing and packing facility in the next 12 months and will incur further expenditures in the years following.

In January 2025, we announced that we plan to install an additional Moba egg grading system at our Egg Central Station facility in Missouri.

We anticipate that we will incur approximately $12.0 million to $16.0 million in capital expenditures related to the new Moba egg grading system in the next 12 months.

Additionally, in 2025 we broke ground on Vital Crossroads, our planned second egg washing and packing facility with onsite cold storage in Seymour, Indiana.

We anticipate that we will incur approximately $120.0 million to $140.0 million in capital expenditures related to the new egg washing and packing facility with onsite cold storage in the next 12 months and will incur further expenditures in the years following.

We also anticipate that we will incur approximately $5.0 million to $15.0 million in capital expenditures over the next 12 months related to the development of accelerator farms on previously acquired farmland in Indiana or the purchase and development of future parcels, with further expenditures incurred in the years following.

Finally, we anticipate increased expenditures in marketing during fiscal 2026 to support progress toward our long-term marketing goals.

On February 19, 2026, our Board of Directors authorized and approved entry into a stock repurchase program, which authorized us to periodically repurchase up to $100.0 million of our common stock through the two-year anniversary of the approval of the stock repurchase program.

Repurchases of our common stock made under the stock repurchase plan shall be effected from time to time, including, without limitation, pursuant to one or more written repurchase plans intended to qualify for the protections of Rule 10b5-1 of the Exchange Act, open market transactions made in reliance on the Rule 10b-18 of the Exchange Act safe harbor, and/or similar arrangements.

Credit Facility

On April 9, 2024, we entered into the JPMorgan Credit Facility with JPMorgan Chase Bank, N.A.

On April 9, 2024, we entered into the Credit Facility with JPMorgan Chase Bank, N.A.

and the other lenders party thereto, which provides for a five-year, $60.0 million revolving credit facility.

The JPMorgan Credit Facility replaced the PNC Credit Facility, which terminated concurrently with our entry into the JPMorgan Credit Facility.

The JPMorgan Credit Facility includes a $5.0 million letter of credit sub-limit and an accordion option that would allow us to increase the aggregate revolving commitments or add incremental term loans in an aggregate amount not to exceed the greater of (i) $35.0 million and (ii) an amount equal to 100% of consolidated adjusted EBITDA.

Any borrowings under the JPMorgan Credit Facility bear interest, at our election, at either (i) an adjusted term Secured Overnight Financing Rate or adjusted daily Secured Overnight Financing Rate plus 0.10% plus a margin of either 0.75%, 1.00% or 1.25% depending on our net leverage ratio, or (ii) an alternative base rate plus a margin of either 1.75%, 2.00% or 2.25%, depending on our net leverage ratio.

The Credit Facility includes a $5.0 million letter of credit sub-limit and an accordion option that would allow us to increase the aggregate revolving commitments or add incremental term loans in an aggregate amount not to exceed the greater of (i) $35.0 million and (ii) an amount equal to 100% of consolidated adjusted EBITDA.

Any borrowings under the Credit Facility bear interest, at our election, at either (i) an adjusted term Secured Overnight Financing Rate or adjusted daily Secured Overnight Financing Rate plus 0.10% plus a margin of either 0.75%, 1.00% or 1.25% depending on our net leverage ratio, or (ii) an alternative base rate plus a margin of either 1.75%, 2.00% or 2.25%, depending on our net leverage ratio.

We are required to pay a commitment fee on the undrawn portion of the aggregate commitments that accrues at either 0.20% or 0.375% per annum depending on our revolving exposure.

Additionally, we are required to pay a participation fee on the account of each lender for each outstanding letter of credit at a rate equal to the applicable rate used to determine the interest rate applicable to term benchmark revolving loans.

The JPMorgan Credit Facility is secured by liens on substantially all of our assets, including certain intellectual property assets and investment securities.

The Credit Facility is secured by liens on substantially all of our assets, including certain intellectual property assets and investment securities.

It requires us to maintain (i) a net leverage ratio of no greater than 3.25 to 1.00, subject to two increases up to 4.00 to 1.00 for a certain period following material acquisitions, and (ii) a fixed charge coverage ratio of no less than 1.35 to 1.00.

The JPMorgan Credit Facility contains other customary covenants, representations and events of default.

As a result of the limitations contained in the JPMorgan Credit Facility, certain of the net assets on our consolidated balance sheet as of December 29, 2024 are restricted in use.

As of December 29, 2024, there was no outstanding balance under the JPMorgan Credit Facility, and we were in compliance with all covenants under the JPMorgan Credit Facility.

The Credit Facility contains other customary covenants, representations and events of default.

As a result of the limitations contained in the Credit Facility, certain of the net assets on our consolidated balance sheet as of December 28, 2025 are restricted in use.

As of December 28, 2025, there was no outstanding balance under the Credit Facility, and we were in compliance with all covenants under the Credit Facility.

See “Long-Term Debt—JPMorgan Credit Facility” in Note 14 to our consolidated financial statements included elsewhere in this Annual Report for additional details related to our JPMorgan Credit Facility.

The following table summarizes our cash flows for the periods indicated:

Fiscal Year Ended

52-Weeks Ended

(in thousands)

Net cash provided by operating activities

Net cash (used in) provided by investing activities

Net cash provided by (used in) financing activities

Net increase in cash and cash equivalents

Net cash used in investing activities

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents

Operating Activities

The increase in net cash provided by operating activities during the fiscal year ended December 29, 2024 compared to the fiscal year ended December 31, 2023 was due primarily to higher net income in the current fiscal year due to higher sales, gross margin improvements and better leveraging of selling, general and administrative costs.

The increase was also attributable to an increase in depreciation and amortization and stock-based compensation expenses in fiscal 2024.

These increases were partially offset by changes in operating assets and liabilities, driven by payments on operating lease liabilities.

The decrease in net cash provided by operating activities during the fiscal year ended December 28, 2025 was primarily due to an increase of $60.1 million in net cash outflows compared to the fiscal year ended December 29, 2024, partially offset by (i) an increase in non-cash adjustments of approximately $16.1 million and (ii) an increase of net income of approximately $12.9 million.

The main drivers of the changes in operating assets and liabilities during fiscal 2025 were (i) a $47.8 million increase in inventory purchases and (ii) a $34.7 million cash outflow from payments on our operating lease obligations, partially offset by an increase of $16.9 million in accounts payable due to timing of invoices and payments.

Investing Activities

The change in cash (used in) provided by investing activities during the fiscal year ended December 29, 2024 was primarily due to an increase in purchases of property, plant and equipment and fewer proceeds received on the maturities of our available for sale securities during the year ended December 29, 2024 compared to the year ended December 31, 2023.

The increase in cash used in investing activities during the fiscal year ended December 28, 2025 was primarily due to increases in purchases of property, plant and equipment and available-for-sale securities, partially offset by an increase in maturities and call redemptions of available-for-sale securities during the fiscal year ended December 28, 2025 compared to the fiscal year ended December 29, 2024.

Financing Activities

The change in cash provided by (used in) financing activities during the fiscal year ended December 29, 2024 compared to the fiscal year ended December 31, 2023 was primarily due to an increase in the proceeds received from the exercise of stock options.

The change in net cash used in financing activities of $1.2 million during the fiscal year ended December 28, 2025 as compared to net cash provided by financing activities of $8.6 million during the fiscal year ended December 29, 2024 was primarily driven by (i) a decrease in the proceeds received from the exercise of stock options and (ii) an increase in payments for tax withholding obligations on vested RSU shares during the fiscal year ended December 28, 2025 compared to the fiscal year ended December 29, 2024.

Demand for our products fluctuates in response to seasonal factors.

Demand tends to increase with the start of the school year and is highest prior to holiday periods, particularly Thanksgiving, Christmas and Easter, and is lowest during the summer months.

As a result of these seasonal and quarterly fluctuations, comparisons of our sales and results of operations between different quarters within a single fiscal year are not necessarily meaningful comparisons.

Seasonality may also impact the risk of agricultural diseases such as highly pathogenic avian influenza, which can be influenced by seasonal bird migration patterns.

As a result of seasonal and quarterly fluctuations, comparisons of our sales and results of operations between different quarters within a single fiscal year are not necessarily meaningful comparisons.

Critical Accounting Estimates

1 unchanged sentence

Critical accounting estimates are those estimates that, in accordance with GAAP, involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our consolidated financial statements.

Management has determined that our most critical accounting estimates are those relating to revenue recognition and trade promotions, income taxes, and contingencies.

Management has determined that our most critical accounting estimates are those relating to revenue recognition and trade promotions, and income taxes.

Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ materially from those estimates.

33 unchanged sentences

Our eggs and butter are sourced through a distributed supply chain of small farms.

The price we pay to purchase shell eggs from farmers fluctuates based on pallet weight, and under our buy-sell contracts, which account for all of the laying hens in our network of family farms as of December 29, 2024, the price we pay is also adjusted quarterly for changes in feed cost, which may cause our agreed-upon pricing under these contracts to fluctuate on a quarterly basis.

The price we pay to purchase shell eggs from farmers fluctuates based on pallet weight, and under our buy-sell contracts, which account for all of the laying hens in our network of contracted family farms as of December 28, 2025, the price we pay is also adjusted quarterly for changes in feed cost, which may cause our agreed-upon pricing under these contracts to fluctuate on a quarterly basis.

Our buy-sell contracts subject us to risk of price fluctuations in feed ingredients, primarily consisting of corn and soy.

6 unchanged sentences

Interest Rate Risk

We are subject to interest rate risk in connection with our credit facility agreement with JPMorgan Chase, N.A., or the JPMorgan Credit Facility.

See the section titled “—Liquidity and Capital Resources—Credit Facility” above for additional details related to our JPMorgan Credit Facility.

We are subject to interest rate risk in connection with our credit facility agreement with JPMorgan Chase, N.A., or the Credit Facility.

See the section titled “—Liquidity and Capital Resources—Credit Facility” above for additional details related to our Credit Facility.

Based on the average interest rate on the instruments under the Credit Facility during the fiscal year ended December 28, 2025, and to the extent that borrowings were outstanding, we do not believe that a hypothetical 10% change in the interest rate would have a material effect on our results of operations or financial condition for the fiscal year ended December 28, 2025.

1 unchanged sentence

As of December 28, 2025, we had cash and cash equivalents of $48.8 million and investments in available for sale securities of $64.5 million.

As of December 29, 2024, the effective maturity of our investment securities available for sale was approximately 3 months and the composite credit rating of the holdings is Aa2 on the Moody's rating scale.

As of December 28, 2025, the effective maturity of our investment securities available for sale was approximately three months and the composite credit rating of the holdings is Aaa on the Moody ’ s rating scale.

We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure during the fiscal year ended December 28, 2025.

5 unchanged sentences

Consolidated Statements of Comprehensive Income

Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders’ Equity

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

5 unchanged sentences

We have audited the accompanying consolidated balance sheets of Vital Farms, Inc.

and subsidiary (the Company) as of December 29, 2024 and December 31, 2023, the related consolidated statements of income, comprehensive income, redeemable noncontrolling interest and stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended December 29, 2024, and the related notes (collectively, the consolidated financial statements).

and subsidiary (the Company) as of December 28, 2025 and December 29, 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended December 28, 2025, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2025 and December 29, 2024, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended December 28, 2025, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 29, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2025 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 28, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2026expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

14 unchanged sentences

Evaluation of the sufficiency of audit evidence obtained over eggs and butter revenue

As discussed in Notes 2 and 6 to the consolidated financial statements, the Company generates revenue primarily through the sale of eggs and butter.

The Company recognized $580,954 thousand of eggs and egg-related products net revenue and $25,353 thousand of butter and butter-related products net revenue for the fiscal year ended December 29, 2024.

The Company’s management identified a material weakness related to the revenue process as of December 29, 2024.

We identified the evaluation of the sufficiency of audit evidence obtained over eggs and egg-related products net revenue and butter and butter-related products net revenue as a critical audit matter.

Subjective auditor judgment was required due to the highly automated nature of certain processes to record revenue that involve interfacing data across multiple information technology (IT) systems, and the material weakness described above.

As discussed in Notes 2 and 6 to the consolidated financial statements, the Company’s net revenue is primarily generated from the sale of eggs and butter.

The Company recognized net revenue of $733,176 thousand from eggs and egg-related products (eggs revenue) and $26,268 thousand from butter and butter-related products (butter revenue) for the fiscal year ended December 28, 2025.

We identified the evaluation of the sufficiency of audit evidence obtained over eggs revenue and butter revenue as a critical audit matter.

Subjective auditor judgment was required due to the highly automated nature of certain processes to record egg revenue and butter revenue that involved the interface of data across multiple information technology (IT) systems and third-party logistics providers and a system implementation in fiscal 2025.

Additionally, IT professionals with specialized skills and knowledge were required to determine the nature and extent of audit evidence to obtain and to evaluate the results of the procedures.

The following are the primary procedures we performed to address this critical audit matter.

We applied auditor judgment to determine the nature and extent of procedures to be performed over the processing and recording of revenue, including consideration of the material weakness.

We evaluated the reliability of information used in our procedures by comparing information in certain IT systems to underlying documentation.

We performed a software-assisted data analysis to test relationships among certain revenue transactions.

On a sample basis, we tested certain revenue transactions by comparing the

recorded amounts to underlying documentation, including invoices, cash receipts, bills of lading, and contracts with customers.

We applied auditor judgment to determine the nature and extent of procedures to be performed over the processing and recording of eggs revenue and butter revenue.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the processing and recording of eggs revenue and butter revenue, including controls over data from third-party logistics providers and the system implementation.

We involved IT professionals with specialized skills and knowledge who assisted in testing certain general IT and automated internal

controls over IT systems used for the processing and recording of eggs and butter revenue.

For selections of transactions, we evaluated the reliability of information used in our procedures by comparing information in certain IT systems to underlying documentation.

We performed a software-assisted data analysis to test relationships among certain eggs and butter revenue transactions.

For a selection of eggs and butter revenue transactions, we compared the recorded revenue amounts to underlying documentation, including invoices, cash receipts, bills of lading, and contracts with customers.

We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.

8 unchanged sentences

and subsidiary's (the Company) internal control over financial reporting as of December 28, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, because of the effect of the material weakness, described below, on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 29, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 29, 2024 and December 31, 2023, the related consolidated statements of income, comprehensive income, redeemable noncontrolling interest and stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended December 29, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2025 expressed an unqualified opinion on those consolidated financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

A material weakness related to the Company’s revenue process has been identified and included in management’s assessment.

The material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and this report does not affect our report on those consolidated financial statements.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 28, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 28, 2025 and December 29, 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended December 28, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 26, 2026 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

25 unchanged sentences

Prepaid expenses and other current assets, net of allowance for credit losses of $ 34 and $ 240 as of December 28, 2025 and December 29, 2024, respectively

Income taxes receivable

Assets held for sale

Total current assets

22 unchanged sentences

Retained earnings

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Total stockholders’ equity

18 unchanged sentences

Income tax provision

Net loss attributable to noncontrolling interests

Net income attributable to Vital Farms, Inc.

common stockholders

Net income per share attributable to Vital Farms, Inc.

stockholders:

Net income per share:

Weighted average common shares outstanding:

4 unchanged sentences

Fiscal Year Ended

Other comprehensive income (loss), before tax:

Other comprehensive income, before tax:

Available-for-sale debt securities:

Unrealized net holding gain (loss)

Amounts reclassified for realized losses to earnings

Unrealized net holding gain

Amounts reclassified for realized (gains) losses to earnings

Available-for-sale debt securities, before tax

Other comprehensive income (loss), before tax

Income tax (expense) benefit related to items of other comprehensive income (loss)

Other comprehensive income (loss), net of tax

Comprehensive income (loss)

Comprehensive loss attributable to noncontrolling interests

Comprehensive income (loss) attributable to Vital Farms, Inc.

common stockholders

Other comprehensive income, before tax

Income tax expense related to items of other comprehensive income

Other comprehensive income, net of tax

Comprehensive income

See accompanying notes to the consolidated financial statements.

VITAL FARMS, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in thousands, except share amounts)

Noncontrolling

Comprehensive

Stockholders’

Noncontrolling

Stockholders’

(Loss) Income

2 unchanged sentences

Vesting of restricted stock units

Shares withheld for tax liability on vested restricted stock units

Shares issued under employee stock purchase plan

Stock-based compensation expense

Dissolution of noncontrolling interest

Net loss attributable to noncontrolling interests - stockholders

Other comprehensive loss, net

Net income attributable to Vital Farms, Inc.

Other comprehensive income, net

Balances at December 31, 2023

5 unchanged sentences

Other comprehensive income, net

Net income attributable to Vital Farms, Inc.

Balances at December 29, 2024

5 unchanged sentences

Other comprehensive income, net

Net income attributable to Vital Farms, Inc.

Balances at December 28, 2025

5 unchanged sentences

Cash flows from operating activities:

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Reduction in the carrying amount of right-of-use assets

Amortization of available-for-sale debt securities

Amortization and accretion of available-for-sale securities

Amortization of cloud computing arrangements

Amortization of debt issuance costs

3 unchanged sentences

Net realized losses on derivative instruments

Increase in inventory provision

Changes in operating assets and liabilities:

Accounts receivable

Income taxes receivable

Prepaid expenses and other current assets

Deposits and other assets

Income taxes receivable

Income taxes payable

2 unchanged sentences

Operating lease liabilities

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of property, plant and equipment

Purchases of leasehold improvements

Purchases of available-for-sale debt securities

Purchases of available-for-sale securities

Purchases of derivative instruments

Sales of available-for-sale debt securities

Sales of available-for-sale securities

Settlements of derivative instruments

Maturities and call redemptions of available-for-sale debt securities

Maturities and call redemptions of available-for-sale securities

Proceeds from the sale of property, plant and equipment

Return of investment in variable interest entity

Dissolution of equity investment

Net cash (used in) provided by investing activities

12 unchanged sentences

Payment of financing costs

Payment of contingent consideration

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of the period

2 unchanged sentences

Cash paid for interest

Cash paid for income taxes

Cash paid for income taxes, net of amounts refunded

Supplemental disclosure of non-cash investing and financing

40 unchanged sentences

As of December 28, 2025 and December 29, 2024 , cash and cash equivalents consisted of cash on deposit with balances denominated in U.S.

dollars and investments in money market funds.

dollars and investments in money market funds and U.S.

treasury bills.

Investment Securities:

8 unchanged sentences

Interest and dividends on securities classified as available-for-sale are recorded in interest income.

Variable Interest Entity:

The Company consolidates all entities where a controlling financial interest exists.

For fiscal 2022, the Company considered its relationship with Ovabrite, Inc., which was dissolved in September 2022, to determine whether the Company had a variable interest in that entity, and if so, whether the Company was the primary beneficiary of the relationship.

GAAP requires variable interest entities (“VIEs”) to be consolidated if an entity’s interest in the VIE is a controlling financial interest.

Under the variable model, a controlling financial interest is determined based on which entity, if any, has (i) the power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance and (ii) the obligations to absorb losses that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change.

The consolidation status of a VIE may change as a result of such reassessments.

Changes in consolidation status are applied prospectively in accordance with GAAP.

Segment Information:

19 unchanged sentences

The allowance for expected credit losses related to other non-trade receivables are estimated based on the aging category and the probability of default.

Inventories are stated at the lower of cost (determined under the weighted average cost method) or net realizable value.

Inventories are stated at the lower of cost (which approximates weighted average costs) or net realizable value.

In addi tion to product cost, inventory costs include expenditures such as in-bound shipping and handling and warehousing costs incurred in bringing the inventory to its existing condition and location.

16 unchanged sentences

Depreciation and amortization are computed using the straight-line method over the estimated useful lives.

The general range of useful lives of other property, plant and equipment is as follows:

The general range of useful lives of property, plant and equipment is as follows:

Estimated Useful Life

Land improvements

15 to 20 years

Buildings and improvements

1 unchanged sentence

Machinery and equipment

3 to 10 years

Furniture and fixtures

15 unchanged sentences

Costs incurred to implement cloud computing service arrangements are capitalized when incurred during the application development phase and recognized as other current assets and other non-current assets in the consolidated balance sheets.

Amortization of the cloud computing arrangement implementation costs will begin once the software is placed in service.

Amortization of the cloud computing arrangement implementation costs began when the software was placed in service in September 2025 and is recorded in selling, general and administrative expenses.

The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations.

15 unchanged sentences

The Company did no t recognize an impairment loss during the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 .

Noncontrolling Interest:

The Company recognizes noncontrolling interest related to VIEs in which the Company is the primary beneficiary, as equity in the consolidated financial statements separate from the parent entity’s equity.

The amount of net income or loss attributable to noncontrolling interests is included in consolidated net income on the face of the consolidated statements of income.

Changes in the parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest.

In addition, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary will be initially measured at fair value and the difference between the carrying value and fair value of the retained interest will be recorded as a gain or loss.

Affiliate equity interests where the Company has certain rights to demand settlement are presented at their current redemption values, as redeemable noncontrolling interest in the consolidated balance sheet.

Because these transactions take place between entities under common control, any gains or losses attributable to these transactions are required to be included within additional paid-in-capital on the consolidated balance sheets.

Income Taxes:

9 unchanged sentences

As of December 28, 2025 and December 29, 2024 the Company had accrued interest and penalties related to uncertain tax positions of $ 499 and $ 157 .

Net Income per Share Attributable to Vital Farms, Inc.

Common Stockholders:

Net Income per Share:

The Company applies the two-class method to compute basic and diluted net income per share attributable to the Company’s common stockholders when shares meet the definition of participating securities.

9 unchanged sentences

Revenue is recognized when control of the product is transferred to the customer and the related performance obligation is satisfied, which typically occurs upon delivery of the product to the customer, for an amount that reflects the net consideration the Company expects to receive in exchange for delivering the product.

The Company offers sales incentives through various programs to customers and allow deductions from its customers, which may include credits or discounts to customers in the event that products do not conform to customer specifications or expire at a customer’s site.

The Company offers sales incentives through various programs to customers and allows deductions from its customers, which may include credits or discounts to customers in the event that products do not conform to customer specifications or expire at a customer’s site.

The cost associated with variable consideration is estimated and recorded as a reduction in revenue and is recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure.

22 unchanged sentences

Recently Adopted Accounting Pronouncements:

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) and also issued subsequent amendments to the initial guidance, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11, ASU 2020-02, ASU 2020-03 and ASU 2022-02 (collectively, “Topic 326”), to introduce a new impairment model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses.

Topic 326 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected.

The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts.

An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances.

The Company adopted ASU 2016-13 on December 26, 2022.

Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.

There was no impact on the Company’s consolidated financial statements at adoption.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which intends to simplify the guidance by removing certain exceptions to the general principles and clarifying or amending existing guidance.

ASU 2019-12 is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

The Company adopted ASU 2019-12 during fiscal 2022 and there was no material impact on the Company’s consolidated financial statements for the fiscal years ended December 25, 2022, December 31, 2023 and December 29, 2024.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures (“ASU 2023-07”) in order to improve stockholders’ understanding of an entity’s business activities through enhanced disclosures around reportable segments.

ASU 2023-07 requires incremental and more detailed disclosure regarding segment expenses on both an annual and interim basis.

The Company adopted ASU 2023-07 on December 29, 2024.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements but resulted in expanded disclosures in Note 23 “Segment Reporting” below.

Recently Issued Accounting Pronouncements Not Yet Adopted:

In December 2023, the FASB issued ASU No 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures (“ASU 2023-09”) in order to enhance the transparency and usefulness of income tax disclosures.

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU No 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures (“ASU 2023-09”) in order to enhance the transparency and usefulness of income tax disclosures.

The guidance is applicable to all entities subject to income tax and it will require disclosure of certain categories within the rate reconciliation to improve consistency as well as disclosure of reconciling items which meet a certain quantitative threshold which will improve transparency.

1 unchanged sentence

For public business entities ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

The Company expects to adopt the standard for the fiscal year beginning December 30, 2024.

The Company is currently evaluating the impact of its pending adoption of ASU 2023-09 on its consolidated financial statements.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements but resulted in expanded disclosures in Note 17 “Income Taxes” below.

Recently Issued Accounting Pronouncements Not Yet Adopted:

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

2 unchanged sentences

The Company is currently evaluating the impact of its pending adoption of ASU 2024-03 on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40) — Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the accounting for internal-use software under ASC 350-40 by aligning it with current development practices, especially agile and iterative methods.

It clarifies when to begin capitalizing costs, improves operability across different development approaches, and enhances disclosure

requirements.

This update is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of its pending adoption of ASU 2025-06 on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-11.

Investment Securities

4 unchanged sentences

Allowance for Credit Losses

corporate bonds and U.S.

denominated foreign bonds

Treasury Bills

The following table summarizes the Company’s available-for-sale investment securities as of December 29, 2024:

23 unchanged sentences

Unrealized Losses

corporate bonds and U.S.

denominated foreign bonds

Treasury Bills

December 29, 2024

6 unchanged sentences

denominated foreign bonds

As of December 29, 2024, there were 13 diversified issuances in the Company’s securities portfolio in an unrealized loss position, with credit ratings from BBB- to A+.

As of December 29, 2024, there are no individual bonds with unrealized losses exceeding $ 3 , and 13 issuances have been in a loss position greater than 12 months.

The decline in fair value has resulted primarily from rising interest rates over the last 12 months, and the Company does not believe there has been any significant decline in the creditworthiness of the issuers.

The Company also does not believe it is likely that a significant number of bonds will be called early, and it does not have liquidity needs that would necessitate a sale of any material investments prior to maturity.

As of December 28, 2025 , there were no diversified issuances in the Company’s securities portfolio in an unrealized loss position.

The Company does not believe there has been any significant decline in the creditworthiness of the issuers and the Company does not have current liquidity needs that would necessitate a sale of any material investments prior to maturity.

Therefore, the Company has no t recorded an allowance for credit losses on the investment securities as of December 28, 2025.

13 unchanged sentences

In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety.

The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

The Company’s assessment of the significance of a

particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis for the periods presented:

1 unchanged sentence

Cash and cash equivalents:

Treasury Bills

Investment securities, available-for-sale:

corporate bonds and U.S.

denominated foreign bonds

Treasury Bills

Prepaid expenses and other current assets:

20 unchanged sentences

The Company’s product offerings include shell eggs, hard-boiled eggs, liquid whole eggs, and stick butter.

The Company’s previous convenient breakfast product line (including egg bites and egg-based breakfast bars) was discontinued in 2022, and the Company’s ghee and spreadable tub butter offerings were discontinued during the fiscal year ended December 31, 2023 .

The Company’s ghee and spreadable tub butter offerings were discontinued during the fiscal year ended December 31, 2023.

The revenues related to the discontinued product lines were immaterial.

16 unchanged sentences

As of December 29, 2024

Provisions charged to operating results

(Provisions) reductions charged to operating results

Account write-offs

5 unchanged sentences

On a periodic basis, the Company compares the amount of inventory on hand with its latest forecasted requirements to determine whether charges for excess or obsolete inventory reserves are required.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following as of the periods presented:

Prepaid expenses

Other receivables, net

Cloud computing implementation costs

Derivative financial instruments

Prepaid expenses and other current assets, net

Property, Plant and Equipment

9 unchanged sentences

During the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023, depreciation of property, plant and equipment was approximately $ 9,254 , $ 9,255 , and $ 7,925 , respectively.

The Company leases office facilities, warehouses, office equipment and vehicles for delivery of products under lease agreements with initial terms approximating one to five years.

During the 52-week period ended December 28, 2025, the Company elected to sell certain parcels of land located in Indiana previously purchased for the development of “accelerator farms” that in the aggregate total approximately 526 acres.

Such parcels of land met the criteria to be classified as assets held for sale.

As of December 28, 2025 , approximately 263 acres remain to be sold with a carrying amount of $ 2.1 million classified as assets held for sale in the condensed consolidated balance sheets and are expected to be disposed of within the next 12 months.

The Company leases office facilities, warehouses, office equipment and vehicles for delivery of products under lease agreements with initial terms approximating one to eleven years.

The Company's finance leases include leases on a transportation fleet as well as office equipment and its operating leases primarily consist of leases on its buildings, including its corporate headquarters.

1 unchanged sentence

These arrangements convey to the Company the right to control implicitly identified property, plant and equipment as it takes substantially all the utility generated by these assets over the term of the arrangements at a variable price.

The initial term of these supply agreements ranges from one to seven years .

The initial term of these supply agreements ranges from one to ten years .

Excluding upfront leasing costs discussed below, the total purchase commitments contained in these arrangements are variable and represent rentals;

1 unchanged sentence

Beginning in December 2023, the Company executed long-term supply contracts with farms to provide an upfront lease payment to offset farm construction costs, loans and other startup costs.

The upfront leasing costs have been classified within operating lease right-of-use assets on the consolidated balance sheet for the years ended December 29, 2024 and December 31, 2023 and are amortized to cost of goods sold over the term of the long term supply arrangements.

The upfront leasing costs have been classified within operating lease ROU assets on the consolidated balance sheet for the fiscal years ended December 28, 2025 and December 29, 2024 and are amortized to cost of goods sold over the term of the long-term supply arrangements.

As the classification and timing of recognition of costs attributable to the eggs and embedded cost of the lease rentals are identical, the Company does not allocate the total purchase cost of eggs between the cost of the eggs and the embedded cost of the lease rentals or distinguish between them in its accounting records.

11 unchanged sentences

Operating lease cost

Finance lease cost – amortization of right-of-use assets

Finance lease cost – amortization of ROU assets

Finance lease cost – interest on lease liabilities

31 unchanged sentences

Financing cash outflows - principal payments on finance leases

Right-of-use assets obtained in exchange for new lease obligations:

ROU assets obtained in exchange for new lease obligations:

As of December 28, 2025

2 unchanged sentences

Finance leases

Decreases in ROU assets related to lease terminations and modifications:

Fiscal Year Ended

Operating leases

Finance leases

Goodwill and Other Assets

Goodwill and other assets consisted of the following as of the periods presented:

Cloud computing implementation costs

Cloud computing implementation costs, net

Deferred tax asset

1 unchanged sentence

Goodwill and other assets

As of December 28, 2025 and December 29, 2024 the Company has capitalized costs of $ 12,849 and $ 4,206 relating to cloud computing arrangement implementation costs.

Of this total, $ 9,501 and $ 3,834 are classified as non-current assets under the heading “goodwill and other assets”, including $ 668 and $ 0 of accumulated amortization, and $ 2,680 and $ 372 are classified as current assets under the heading “prepaid expenses and other current assets” as of December 28, 2025 and December 29, 2024, respectively.

This software was developed by a third-party in conjunction with the Company’s employees.

Amortization of the cloud computing arrangement implementation costs began once the software was placed in service in September 2025 and classified within “selling, general and administrative costs.

Accrued Liabilities

1 unchanged sentence

Employee-related costs

Trade promotions and chargebacks

Promotions and customer deductions

Distribution fees and freight

2 unchanged sentences

Professional fees

Property, plant and equipment

Accrued liabilities

Product Exit Costs

During the fiscal year ended December 25, 2022, the Company made the decision to exit its convenient breakfast product category due to a shift in focus to product offerings core to the Company’s operations.

Charges incurred in connection with these product exits were substantially complete by December 25, 2022, and the Company believes the actual charges as shown below approximate fair value.

During the fiscal year ended December 31, 2023, the Company made the decision to exit its ghee and spreadable tub butter product offerings.

Charges incurred in connection with these product exits were immaterial.

The ending liability balances related to the convenience breakfast category exit as of December 29, 2024 and December 31, 2023 were immaterial.

The following table summarizes the activity related to the exit of the Company’s convenient breakfast products during the periods presented:

For the Fiscal Year Ended December 25, 2022

Statement of Income

Classification

Charges Incurred

Amounts Paid or Settled

Amounts Realized as Unutilized

Ending Liability Balance

Contract terminations

Selling, general and administrative

Inventory obsolescence

Cost of goods sold

Customer allowances

Asset write-downs

Cost of goods sold

Co-manufacturer chargers

Cost of goods sold

Asset disposals

Selling, general and administrative

Long-Term Debt

PNC Credit Facility

In October 2017, the Company entered into a credit facility agreement with PNC Bank, National Association (the “PNC Credit Facility”) which was modified at various times between fiscal 2018 and fiscal 2023.

Such amendments included (i) amendments to various definitions and covenants, (ii) waiver of a technical default in May 2020, (iii) increased borrowing capacity, (iv) elimination of a term loan and equipment loan, and (v) extension of the maturity date.

The PNC Credit Facility was terminated on April 9, 2024 when the Company entered into a syndicated credit agreement with JPMorgan Chase Bank, N.A.

and the other lenders party thereto (the “JPMorgan Credit Facility”).

The maximum borrowing capacity under the PNC Credit Facility’s revolving line of credit was $ 20.0 million.

Interest on borrowings under the revolving line of credit, as well as loan advances thereunder, accrued at a rate, at the Company’s election at the time of borrowing, equal to (i) the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York plus 2.00 % or (ii) 1.00 % plus the alternate base rate, as defined in the PNC Credit Facility.

The PNC Credit Facility was secured by all of the Company’s assets (other than real property and certain other property excluded pursuant to the terms of the PNC Credit Facility) and required the Company to maintain three financial covenants:

a fixed charge coverage ratio, a leverage ratio and a minimum tangible net worth requirement.

The PNC Credit Facility also contained various covenants relating to limitations on indebtedness, acquisitions, mergers, consolidations and the sale of properties and liens.

The PNC Credit Facility also contained other customary covenants, representations and events of default.

JPMorgan Credit Facility

On April 9, 2024, the Company entered into the JPMorgan Credit Facility, which provides for a five-year, $ 60.0 million revolving credit facility.

The JPMorgan Credit Facility includes a $ 5.0 million letter of credit sub-limit and an accordion option that would allow the Company to increase the aggregate revolving commitments or add incremental term loans in an aggregate amount not to exceed the greater of (i) $ 35.0 million and (ii) an amount equal to 100 % of consolidated adjusted EBITDA.

Any borrowings under the JPMorgan Credit Facility bear interest, at the Company’s election, at either (i) an adjusted term Secured Overnight Financing Rate or adjusted daily Secured Overnight Financing Rate plus 0.10 % plus a margin of either 0.75%, 1.00% or 1.25% depending on the Company’s net leverage ratio or (ii) an alternative base rate plus a margin of either 1.75%, 2.00% or 2.25%, depending on the Company’s net leverage ratio.

The Company is required to pay a commitment fee on the undrawn portion of the aggregate commitments that accrues at either 0.20% or 0.375% per annum depending on the Company’s revolving credit exposure.

On April 9, 2024, the Company entered into a syndicated credit agreement with JPMorgan Chase Bank, N.A.

and the other lenders party thereto (the “Credit Facility”) , which provides for a five-year, $ 60.0 million revolving credit facility.

The Credit Facility includes a $ 5.0 million letter of credit sub-limit and an accordion option that would allow the Company to increase the aggregate revolving commitments or add incremental term loans in an aggregate amount not to exceed the greater of (i) $ 35.0 million and (ii) an amount equal to 100 % of consolidated adjusted EBITDA.

Any borrowings under the Credit Facility bear interest, at the Company’s election, at either (i) an adjusted term Secured Overnight Financing Rate or adjusted daily Secured Overnight Financing Rate plus 0.10 % plus a margin of either 0.75%, 1.00% or 1.25% depending on the Company’s net leverage ratio or (ii) an alternative base rate plus a margin of either 1.75%, 2.00% or 2.25%, depending on the Company’s net leverage ratio.

The Company is required to pay a commitment fee on the undrawn portion of the aggregate commitments that accrue at either 0.20% or 0.375% per annum depending on the Company’s revolving credit exposure.

Additionally, the Company is required to pay a participation fee on the account of each lender for each outstanding letter of credit at a rate equal to the applicable rate used to determine the interest rate applicable to term benchmark revolving loans.

The JPMorgan Credit Facility is secured by liens on substantially all of the Company’s assets, including certain intellectual property assets and investment securities.

The Credit Facility is secured by liens on substantially all of the Company’s assets, including certain intellectual property assets and investment securities.

It requires the Company to maintain (i) a net leverage ratio of no greater than 3.25 to 1.00, subject to two increases up to 4.00 to 1.00 for a certain period following material acquisitions, and (ii) a fixed charge coverage ratio of no less than 1.35 to 1.00.

As a result of the limitations contained in the JPMorgan Credit Facility, certain of the net assets on the Company’s consolidated balance sheet as of December 29, 2024 are restricted in use.

As a result of the limitations contained in the Credit Facility, certain of the net assets on the Company’s consolidated balance sheet as of December 28, 2025 are restricted in use.

The Company’s wholly owned subsidiaries are non-operating and have no restricted net assets within the meaning of Rule 4-08(e)(3) or Rule 12-04 of Regulation S-X.

As of December 28, 2025, the Company was in compliance with all covenants under the JPMorgan Credit Facility.

As of December 28, 2025 and December 29, 2024 , there were no outstanding amounts under the Credit Facility.

During the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, the Company recognized interest expense related to draws on the respective revolving lines of credit of $ 0 , $ 0 and $ 7 , respectively.

2 unchanged sentences

Each share of the Company’s common stock is entitled to one vote on all matters submitted to a vote of the Company’s stockholders .

Holders of the Company’s common stock are entitled to receive dividends as may be declared by the Board of Directors (the “Board of Directors”) , if any, subject to the preferential dividend rights of preferred stock, if any.

Holders of the Company’s common stock are entitled to receive dividends as may be declared by the Company’s Board of Directors (the “Board of Directors”) , if any, subject to the preferential dividend rights of preferred stock, if any.

No cash dividends were declared or paid during the periods presented.

4 unchanged sentences

Shares available for grant under the 2020 Equity Incentive

Plan (“2020 Incentive Plan”) and 2020 Employee Stock Purchase Plan (“2020 ESPP”)

Plan (“2020 Incentive Plan”) and 2020 Employee Stock

Purchase Plan (“2020 ESPP”)

Stock-Based Compensation

3 unchanged sentences

Selling, general and administrative expense 2

Includes $ 18 , $ 7 and $ 6 of expense related to the 2020 ESPP as of December 29, 2024, December 31, 2023, and December 25, 2022 , respectively.

Includes $ 149 , $ 97 and $ 57 of expense related to the 2020 ESPP as of December 29, 2024, December 31, 2023, and December 25, 2022 , respectively.

Includes $ 89 , $ 18 and $ 7 of expense related to the 2020 ESPP for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 , respectively.

Includes $ 253 , $ 149 and $ 97 of expense related to the 2020 ESPP for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 , respectively.

Stock Option Activity

The following table summarizes the Company’s stock option activity since December 31, 2023:

The following table summarizes stock option activity since December 29, 2024:

Outstanding as of December 29, 2024

13 unchanged sentences

27.8 % - 29.2 %

27.6 % - 28.6 %

Risk-free interest rate

3.63 % - 4.45 %

1.64 % - 4.16 %

Expected dividend yield

5 unchanged sentences

Restricted Stock Unit Activity

The following table summarizes the RSU activity since December 31, 2023:

The following table summarizes RSU activity since December 29, 2024:

Grant Date Fair Value

1 unchanged sentence

Unvested as of December 28, 2025

Includes 68,219 shares of common stock that were withheld to cover taxes on the release of vested RSUs and became available for future grants pursuant to the 2020 Equity Incentive Plan.

Includes 101,773 shares of common stock that were withheld to cover taxes on the release of vested RSUs and became available for future grants pursuant to the 2020 Incentive Plan.

As of December 28, 2025, total unrecognized stock-based compensation expense related to the Company’s unvested RSU activity was $ 10,327 , which is expected to be recognized over a weighted-average period of 1.82 years.

5 unchanged sentences

The number of PSUs expected to vest and for which compensation cost has been recognized is based on the number of awards that the Company believes are probable to vest as of December 28, 2025.

The following table summarizes the PSU activity since December 31, 2023:

The following table summarizes PSU activity since December 29, 2024:

Grant Date Fair Value

14 unchanged sentences

The Board of Directors authorizes six-month offering periods, with the most recent beginning on November 16, 2025.

The Company’s income before income taxes is entirely derived from domestic sources for all periods presented :

Net income before income taxes

For the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, the provision for income taxes consisted of the following:

Total current income tax expense

Total deferred income tax expense

Provision for income taxes

The Company’s income before income taxes is entirely derived from domestic sources for all periods presented.

For the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, the income taxes paid by the Company, net of amounts refunded are as follows:

Total income taxes paid, net of amounts refunded

The reconciliation of the federal statutory income tax provision to the Company’s effective income tax provision is as follows:

Provision at statutory rate of 21 %

State income taxes

Stock-based compensation

Non-deductible costs

Charitable deduction

Change in deferred tax asset valuation allowance

Revisions to prior year

Changes in uncertain tax positions

Net income before income taxes

US federal statutory rate

Current state and local income taxes, net of federal income tax effect (1)

Change in valuation allowance

Nontaxable or nondeductible items:

Nondeductible compensation

Share-based payment awards

Other nontaxable costs

Changes in unrecognized tax benefits

Other adjustments

Provision for income taxes

(1) State taxes in California, New Jersey and Florida made up greater than 50% of the tax effect in this category for the fiscal years ended December 28, 2025 and December 31, 2023 and state taxes in California and New Jersey made up greater than 50% of the tax effect in this category for the fiscal year ended December 29, 2024.

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The Company’s deferred income tax assets and liabilities at December 29, 2024 and December 31, 2023 were comprised of the following:

The Company’s deferred income tax assets and liabilities as of December 28, 2025 and December 29, 2024 were comprised of the following:

Deferred tax assets:

3 unchanged sentences

Stock-based compensation

Lease liability

ROU lease liability

Total deferred tax assets

3 unchanged sentences

Prepaid expenses

Property, plant and equipment

Operating and finance lease right of use assets

Property and equipment

Operating and finance lease ROU assets

Intangible assets

Total deferred tax liabilities

Net deferred tax assets (liabilities)

Net deferred tax assets

A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized.

2 unchanged sentences

Management considered the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment.

The activity in the Company’s deferred tax asset valuation allowance for the fiscal years ended December 29, 2024 and December 31, 2023 was as follows:

The activity in the Company’s deferred tax asset valuation allowance for the fiscal years ended December 28, 2025 and December 29, 2024 were as follows:

Valuation allowance as of beginning of year

4 unchanged sentences

The unrecognized tax benefits are long-term in nature and the Company does not anticipate the balance of the unrecognized tax benefits to change materially in the next 12 months.

The following table reflects changes in gross unrecognized tax benefits:

Gross tax contingencies as of beginning of year

2 unchanged sentences

Gross tax contingencies as of end of year

As of December 28, 2025 and December 29, 2024 , the Company had uncertain tax positions of $ 1.7 million and $ 0.6 million and deferred tax liabilities of $ 1.1 million and $ 0 , respectively, under the heading “Other liabilities” in the consolidated balance sheets.

The Company files a U.S.

4 unchanged sentences

Fiscal Year Ended

Net loss attributable to noncontrolling interests

Net income attributable to Vital Farms, Inc.

stockholders’ — basic and diluted

Weighted average common shares outstanding — basic

12 unchanged sentences

Unvested PSUs

Accumulated Other Comprehensive Income (Loss)

The amounts reclassified from accumulated other comprehensive income (loss) (“AOCI”) to the statements of income were as follows:

Accumulated Other Comprehensive Income

The amounts reclassified from accumulated other comprehensive income (“AOCI”) to the statements of income were as follows:

Amounts Reclassified from AOCI

2 unchanged sentences

Statement of Income Classification

Losses on available-for-sale securities

Gains (losses) on available-for-sale securities

Other income, net

Total before tax

The gross amount and related tax expense recorded in, and associated with, each component of other comprehensive income (loss) were as follows:

The gross amount and related tax expense recorded in, and associated with, each component of other comprehensive income were as follows:

Fiscal Year Ended

1 unchanged sentence

December 29, 2024

Available-for-sale debt securities:

Available-for-sale securities:

Unrealized net holding gain

Amounts reclassified for realized losses to earnings

Total other comprehensive income (loss)

Amounts reclassified for realized gains (losses) to earnings

Total other comprehensive income

Commitments and Contingencies

Supplier Contracts:

The Company purchases its egg inventories under long-term supply contracts with farms.

Purchase commitments contained in these arrangements are variable dependent upon the quantity of eggs produced by the farms.

Accordingly, there are no estimable future purchase commitments associated with these supplier contracts and there are no minimum payments associated with these long-term supply contracts.

The Company records the total cost of eggs into inventory and they are expensed to cost of goods sold when the associated eggs are sold to customers and are also reported as part of the Company’s variable lease cost.

The Company has entered into agreements with certain qualifying suppliers to provide a one-time payment of up to $ 200,000 , for the purpose of funding costs associated with farm startup.

The payment of these incremental costs is contingent upon the achievement of certain milestones and is to be made no sooner than 90 days prior to the pullet placement date specified in each supplier agreement.

Upon the achievement of such milestones, the Company recognizes an operating ROU asset and lease liability as a cost of obtaining the embedded lease within the supplier contract, which is included in “Leases” in Note 10 above.

As of December 29, 2024, $ 13.4 million has been paid out and $ 1.6 million remains to be paid.

Indemnification Agreements:

8 unchanged sentences

Actual outcomes or losses may differ materially from the Company’s assessments and estimates.

On May 20, 2021, the Company and certain of its current and former officers were named as defendants in a class action complaint captioned Nicholas A.

Vital Farms, Inc.

in the United States District Court for the Western District of Texas (the “District Court”).

The plaintiffs alleged false advertising claims on behalf of themselves and a putative class of alleged consumers of the Company’s eggs.

The named officers of the Company were subsequently dismissed as defendants in this matter.

On July 9, 2024, a U.S.

Magistrate Judge issued an order and report and recommendation, for review and adoption by the District Court.

Collectively, the order and the report and recommendation (i) denied the plaintiffs’ motion for class certification, (ii) excluded the testimony and report of the plaintiffs’ damages expert and (iii) granted summary judgment for the Company with respect to two plaintiffs and three of the plaintiffs’ state claims.

On September 23, 2024, the Magistrate Judge’s order and report and recommendation was adopted by the District Court, and the plaintiffs did not appeal the District Court’s ruling within the required timeline.

The District Court’s order foreclosed the matter proceeding as a class action, and the plaintiffs in the matter agreed to drop their individual claims with prejudice.

The District Court ordered the case closed on January 7, 2025.

The Company does not consider these claims to be material to the Company individually or in the aggregate.

Although the Company maintains insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions and caps on amounts recoverable.

3 unchanged sentences

Related Party Transactions

Ovabrite, Inc., a Delaware corporation (“Ovabrite”), has been deemed a related party because its founders were stockholders of the Company, with the majority stockholder in Ovabrite also serving as the Company’s executive chairperson and member of the Board of Directors.

Since Ovabrite’s incorporation in November 2016, the Company was deemed to have had a variable interest in Ovabrite, and Ovabrite was deemed to have been a VIE, of which the Company was the primary beneficiary.

Accordingly, the Company has consolidated the results of Ovabrite since November 2016.

All significant intercompany transactions between the Company and Ovabrite have been eliminated in consolidation.

Effective August 30, 2022, Ovabrite’s Board of Directors and the holders of the majority of its outstanding capital stock consented to dissolving the entity, and a Certificate of Dissolution was filed with the Delaware Secretary of State.

As of December 29, 2024 and December 31, 2023, Ovabrite had completed its business activities and liquidated its remaining assets.

The results of operations of the Ovabrite entity were immaterial for all periods presented.

Sandpebble Builders Preconstruction, Inc.:

The Company utilizes Sandpebble Builders Preconstruction, Inc.

The Company has utilized Sandpebble Builders Preconstruction, Inc.

and Sandpebble South, Inc.

(collectively “Sandpebble”) for project management and related services associated with the construction and expansion of the Company’s egg processing facilities, including site selection, project management and related services for the Company’s potential future egg packing facility in Seymour, Indiana.

The Company’s contract with Sandpebble for services related to the Company’s next egg packing facility in Seymour, Indiana was awarded after a competitive bidding process.

(collectively “Sandpebble”) for certain project management and related services associated with the construction and expansion of the Company’s egg processing facilities, including certain limited project management and related services for Vital Crossroads, the Company’s second egg washing and packing facility with onsite cold storage in Seymour, Indiana.

Victor Canseco, the owner and principal of Sandpebble, is the father of Russell Diez-Canseco, the Company’s President and Chief Executive Officer and a member of the Board of Directors.

2 unchanged sentences

As of the fiscal years ended December 28, 2025 and December 29, 2024, amounts owed to Sandpebble were $ 136 and $ 303 , respectively, and are included in accounts payable and accrued liabilities.

Whole Foods Market, Inc:

A member of the Board of Directors was, until February 2022, an executive vice president and senior advisor at Whole Foods.

The Company serves the majority of its natural channel retail customers through food distributors, such as US Foods Inc.

and United Natural Foods, Inc., who purchase, store, sell and deliver products to Whole Foods.

While the Company cannot precisely determine its specific revenue attributable to Whole Foods, it is a significant end customer.

401(k) Savings Plan

22 unchanged sentences

Shipping and distribution

Other selling expenses

Other selling, general & administrative (1)

5 unchanged sentences

Segment net income

Reconciliation of profit or loss

Adjustments and reconciling items

Consolidated net income

Excludes depreciation and amortization.

Other segment expenses included in segment net income includes the change in fair value of derivative instruments and other miscellaneous gains and losses.

Subsequent Events

On February 19, 2026, the Board of Directors authorized and approved entry into a stock repurchase program, which authorized the Company to periodically repurchase up to $ 100.0 million of its common stock through February 19, 2028.

Repurchases of common stock made under the stock repurchase plan shall be effected from time to time, including, without limitation, pursuant to one or more written repurchase plans intended to qualify for the protections of Rule 10b5-1 of the Exchange Act, open market transactions made in reliance on the Rule 10b-18 of the Exchange Act safe harbor, and/or similar arrangements.

On February 20, 2026, Matthew O ’Hayer, the Company’s founder, Executive Chairperson and a member of the Company’s Board of Directors, informed the Company and the Board of his resignation as Executive Chairperson, as a member of the Board of Directors and as an employee, effective February 24, 2026.

In connection with Mr.

O’Hayer’s resignation, the Board of Directors decreased the size of the Board from nine to eight members and appointed Russell Diez-Canseco, the Company’s President and Chief Executive Officer and a member of the Board of Directors , to to the additional role of Executive Chairperson effective February 24, 2026.

Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis